BEC Seven-Year Plan/Forecast
Originally known as the "Standalone Forecast," this version of the forecast model has now been adopted as a seven-year plan. The BEC forecast model has been used as a what-if tool for analysis and strategic planning. The forecast model assisted the board in the development of a clearly defined plan for the co-op. The model was used to test alternatives—these were posed as “scenarios." Each scenario showed impacts of different options and how financial elements interrelate. All current forecasts showed the co-op in a solid financial position for at least the next six years.
Four scenarios were run in early 2017. At its April meeting, the board accepted Scenario #5 as the co-op's decisive plan. The financial options finalized in Scenario #5 include: 5% rate decrease in total revenue going into effect July 1, 2017; 20-year capital credit rotation; and borrowing $1.9 million to replace all meters in 2018 and 2019. At the end of the forecast period (2023) long-term debt is approximately equal to current debt (approximately $11.6 million), the new meters are in place for the system, equity is at 42% and all financial ratios are within lender standards.
Although this model defines the co-op's plans for the future, the forecast model will continue to be used to readily test potential changes or updated conditions.